Scoring A 28% Annual Return With Peter Lynch-Style Stockpicking

As someone who has spent the last 15 years figuring out how to get the people of Michigan and Ohio to buy more Jack Daniel's and Southern Comfort, Tony Mitchell, the regional account manager of Brown-Forman, believes he has a good bead on what it takes to excel in consumer marketing. His "buy what you know" Peter Lynch approach to stock picking, and two fortunate holdings (Apple and Priceline), have afforded him an average annual return of 28% for the decade ending Sep 2014, according to San Mateo's Marketocracy, a firm whose asset-management arm is now putting real money behind his portfolio picks. Mitchell will buy only companies in businesses he understands and thus favors consumer marketers. Once he's found a company whose product or service he likes, he digs into the financials, studying the company's cash flow, cash balances, quick ratio (a measure of short-term liquidity) as well as its P/E and PEG ratios.